Long term employment of African-American and white welfare recipients and the role of persistent health and mental health problems

Abstract

We use a panel study of Michigan current and former welfare recipients to estimate the prevalence and persistence of health problems in the post-reform welfare population and their role in women's employment. Rates of health problems were disproportionately high. Over 70 percent of current and former welfare recipients reported limitations in physical functioning; over 60 percent met the criteria for a mental health disorder measured in the study; and 37 percent reported having a child with a health problem in at least one of four interviews over a 4 1/2-year period. Women who reported physical health, mental health, or child health problems at multiple waves worked fewer months. There were no race-based differences in employment length or in physical health problems, but African-Americans were less likely than whites to meet the diagnostic screening criteria for depression, to meet criteria for general anxiety disorder, and to report a child with a health problem. These findings suggest that the inclusion of persistent health problems as determinants of work in human capital models increases understanding of the transition from welfare to work. Policies need to reexamine welfare's work requirements to encourage states to provide services and supports to recipients.